[danuker]

Cutting a key in half doesn't halve its security, but it reduces it exponentially.

256 bits = 2^256 possibilities for bruteforcing

255 bits = 2^255 possibilities for bruteforcing, or half the security of 256 bits

128 bits = 2^128 possibilities, or 1/(2^128) the security

But you can have encryption schemes requiring N-of-M private keys to decrypt.

[chipsa]

You can cut a key in half without literally cutting it in half. Like: generate random 256bit number, xor with the key, and hand the random number to one party, and the xor'd value to the other party.